Be Smart About Your Flexible Spending Account Plan KENT … · Care Tax Credit when filing your annual income tax return. Alternatively, IRC §129 allows you to participate in a Dependent

Helping you be Smart About Benefits.

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Be Smart About Your Flexible Spending Account Plan

Flexible Spending Accounts (FSA) are a great way to increase your take-home pay and save taxes on money you spend for medical and dependent care expenses.

That’s because you do not pay income tax or Social Security tax on your election amount (the money you set aside). A Health FSA account is used for medical expenses, and a Dependent Care Assistance Plan (DCAP) account is used for child care expenses.

Health FSA In a Health FSA account, you can put aside funds to pay for unreimbursed medical, dental and vision expenses (that is, bills that are not paid by any insurance) for yourself and qualifying dependents.

You have access to the full amount of your Annual Election beginning on the first day of the Plan Year.

A list of qualified and non-qualified medical expenses, is included within this informational packet.

Dependent Care Assistance Plan The Internal Revenue Service (IRS) permits you to exclude from gross income a certain amount of the dependent care expenses that you pay in order to work or look for work, and provides two methods for you to do this. Under IRC §21, you can deduct qualified expenses as a Dependent Care Tax Credit when filing your annual income tax return. Alternatively, IRC §129 allows you to participate in a Dependent Care Assistance Plan (DCAP) through your employer’s cafeteria plan. The maximum that can be set aside under this plan is set by the IRS at $5,000 per year per family. DCAP applies to children from birth until their 13th birthday and can reimburse for daycare, preschool and pre-kindergarten, before- and afterschool care, and summer camp (day camp only).

Participation may not be continued while on a leave of absence or layoff. If you return to work during the same Plan Year, your contributions will restart at the same contribution rate in place before you left, unless you request a change due to a qualifying event.

IRS rules state you cannot claim the same expenses under both the dependent care account and the federal tax credit. As a result, you will have to decide which one is more advantageous to you.

You do not have full access to your Annual Election beginning with the new Plan Year. You may only withdraw the amount contributed up to the time you file a claim.

Benefits: Health Care & Dependent Care Reimbursement

Plan Year: 1/1/2019 – 12/31/2019

Maximum Health Care Contribution per Plan Year: $2,650.00

Minimum Health Care Contribution per Plan Year: $130.00

Maximum Dependent Care Contribution per Taxable Year (i.e., calendar year): $5,000

Number of Pay Periods: 26

Debit Card Available: NO

Runout Period: 90 days after the plan year ends to submit claims

Runout Period After Termination: You have 90 days after date of termination to file claims incurred before your termination date

Grace Period: You have 2.5 months after the plan year ends to incur claims

Carry-Over Provision: N/A

Check Runs: Checks are mailed directly to you twice weekly. If you elect direct deposit, the funds will be deposited the next business day.

Employer Code: Provided in a separate mailing

KENT COUNTY



Use it or Lose it: Grace Period The IRS permits employers to provide a Grace Period to incur expenses that can be reimbursed with the prior Plan Year’s remaining funds for both Health Care Expenses or Dependent Care Assistance. Estimate your expenses carefully, as any amount remaining after the Grace Period is forfeited.

Use it or Lose it: Carry-Over Provision The IRS permits employers to allow participants to carry, or roll over, up to $500 in unused funds from the prior Plan Year into the new Plan Year.

Estimate your expenses carefully, as any amount in the Health Care FSA above the Plan’s Carry-Over limit is forfeited.

The Carry-Over provision does not apply to Dependent Care Assistance Plans.

Can I Change My Coverage During the Year? The benefit choices that you are making now will remain in effect until the last day of the plan year, unless you experience a qualified change in family status. If you have a qualified change in family status, the IRS allows you to change your coverage during the plan year to meet your changing needs. Qualified family status changes include:

Change in Legal Marital Status - your marriage, divorce, or legal separation

Change in Dependents - the birth, death, or adoption of a child

Change in Employment - termination, retirement, change in hours with you or spouse, layoff

Change in Residence or Worksite – of employee or spouse

Change in Dependent Status – dependent starts or stops meeting requirements to be eligible for any coverage under this plan

Change in Dependent Care Only:

Change in Cost – change in cost to provide dependent care

Change in Coverage – addition or elimination of benefits options

Change Under Another Plan - change in dependent care benefits under another employer’s plan

If you experience such a change and would like to change your coverage, you must notify your Human Resource Department within 30 days of the qualified change in family status.

Any change you make must be consistent with your change in family status. For example, if you have a baby during the year, you may be eligible to change your Health Care election or you can choose to begin participating in the dependent care reimbursement account, but you could not decide to stop participating in the health care reimbursement account.

What information can I find on your website? The website and mobile app offer 24/7 access to your account balance, claims history and the ability to file claims online.

File a claim online Upload receipts and track expenses View up-to-the-minute account balances View your account activity, claims history and

payment (reimbursement) history Update your personal profile information Change your login ID and/or password Download plan information, forms and

notifications



Tax Savings Calculator Below is an example of the savings a typical FSA participant experiences by contributing to a Health FSA and a Dependent Care Assistance Plan. Varipro offers an automated calculator the through member.varipro.com website.

Example participant is a Michigan resident who is married and files a joint federal tax return.

Without a Section 125 Cafeteria Plan Gross Taxable Income $40,000Federal Income Tax $ 6,000Social Security/Medicare Taxes $ 3,060State Income Tax $ 1,700Spendable Income $29,240Less Dependent Day Care Expense $ 5,000Less Out-of-Pocket Medical/Dental/Vision $ 2,000Net Take-Home Pay $22,240

With a Section 125 Cafeteria Plan

Gross Taxable Income $40,000Less Dependent Day Care Expense $ 5,000Less Out-of-Pocket Medical/Dental/Vision $ 2,000Taxable Income $33,000Federal Income Tax $ 4,950Social Security/Medicare Taxes $ 2,524State Income Tax. $ 1,402Net Take-Home Pay $24,124

This example is designed to provide estimations in regard to the subject matter covered. It is furnished with the understanding that Varipro is not engaged in rendering legal or accounting advice. If legal advice or tax services are required, contact your attorney or tax professional.

FSA Worksheet

Use this worksheet to estimate the amount you want to set aside in your flexible spending accounts

Health Care Expenses Insurance Deductibles $

Insurance Co-Pays $

Dental Deductibles $

Dental Expenses $

Vision Deductibles $

Vision Expenses $

Hearing Expenses $

Prescriptions $

Medical Equipment $

Chiropractor $

Other Medical Expenses $

Total Out-of-Pocket Medical Expenses

$

Divide by Number of Pay Periods Per Year ÷

= Per-Payroll Deduction for Health FSA $

Dependent Care for Children under 13 years of age Day Care Cost Per Week $

Multiply by 52 weeks $

Total Annual Cost (Maximum $5,000) $

Divide by Number of Pay Periods Per Year ÷

= Per-Payroll Deduction for DCAP $

Increase in Spendable Income Through Section 125 Plan:

$1,884 annually, Or, $36.23 per week



Flexible Spending Account Frequently Asked Questions Q: What if I am not covered or I do not

have my dependents covered under my company’s health insurance plan?

A: You and your family can still participate in the Health Flexible Spending Account (FSA) or Dependent Care Assistance Plan (DCAP) Reimbursement Account.

Q: Why should I participate in the health flexible spending account when I already have health insurance?

A: This account is used to pay for expenses that are not covered by insurance. For example, your insurance may not cover annual physicals, co-payments, eye exams, glasses, contacts, orthodontics, prescription drugs, or dental care, just to name a few. (See Eligible/Non-Eligible Expenses list.)

Q: What if I have a claim early in the plan year and do not have enough money in my account?

A: You are eligible for 100% of your election at the start of the plan year for your Health FSA. This is referred to as the “Uniform Coverage Rule.” It gives you the ability to budget your medical expenses and spread them out over the entire year. Your elected payroll deductions will continue throughout the plan year to catch up on the expenses you have been advanced. For the DCAP account, you will be reimbursed as your deductions are deposited with your employer.

Q: Do I have to have a lot of expenses to participate?

A: No. You may put aside enough money to cover what you reasonably expect to spend during your plan year. You should not put more than that, because if you do not use the money, you will lose it. The Internal Revenue Service mandates this provision of the law.

Q: How do I figure how much to put into my medical expense account?

A: Look at your receipts or check register for the last year or two to see what you typically spend annually on medical expenses for yourself and qualified family members. Or, think about what you expect to spend on medical expenses during your plan year. You may be provided with a worksheet to use in estimating your expenses.

Q: Are "Over the Counter" drugs eligible for reimbursement?

A: The Health Care Reform law passed on March 23, 2010 affects all employer sponsored Flexible Spending Accounts. As a result, Flexible Spending Accounts are no longer able to reimburse over the counter (OTC) medicines or drugs (other than insulin) without a doctor’s prescription as of December 31, 2010.

Q: What is proof of payment/required documentation?

A: This would be a copy of your statement, invoice, visit record, explanation of benefits (EOB), or similar document. It should show the date, type of service, the amount of payment, and the provider. Voided/canceled checks and Balance Forward statements are not qualified receipts.

Q: If I set aside pre-tax money in a spending account, why would I lose the money If I don’t spend it?

A: In exchange for the substantial tax advantages associated with an FSA, the IRS requires that any money left in the FSA at the end of the plan year, will be forfeited. This is known as the “use it or lose it” rule. However, if you plan properly, you most likely will not forfeit any money. There are many ways to spend any unused balance before the end of the plan year.

Q: Can expenses be reimbursed from my DCAP at the beginning of the month for care that will be provided during that month?



A: No, regulations require that claims can only be reimbursed after a service has been incurred. So, even though a participant pays for dependent care at the beginning of the month, until the care has been provided, the participant is not entitled to the reimbursement.

Q: Can I participate in the Dependent Care Assistance Plan and also claim the dependent care tax credit?

A: There is no ‘double-dipping.’ If you are using a DCAP you may not also elect the tax credit on the same money. Please consult with your accountant or flex administrator for further review.

Q: Can I change my coverage or contributions during the plan year?

A: The benefit choices that you make will remain in effect until the last day of the plan year, unless you experience a qualified change in family status. If you have a qualifying event or change in status such as marriage, divorce, birth or placement for adoption or loss of a covered dependent, you can change your election amount.

In addition to those mentioned, you are also allowed to make a change to your Dependent Care contribution amount if there is a change in cost to provide dependent care, if there is a change in coverage or change in dependent care benefits under another employee plan.

Q: Can I transfer an account balance from one account to another?

A: No. There is no transfer feature permitted.

Q: What happens if I leave my job?

A: Once your employment is terminated, your plan year is over. The only expenses that you can submit are those that you incurred from

the entry date through the date of termination. These claims need to be submitted within the “run out” period specific to your plan.

You may be eligible for COBRA continuation of coverage. Check with your employer for more information.

Q: What is the "run out" period?

A: It is a specified period of time after the end of the plan year, or after an employment termination date, in which you may submit claims incurred during the time you were covered. For example, if your plan has a 60-day run out period, you will have 60 days from the end of the plan year or 60 days from your termination date to submit claims incurred before your termination date.

Q: How do I submit my claim for reimbursement?

A: You can send your claim to Varipro by using one of the options below:

Upload claims online: www.member.varipro.com

Snap a picture using the mobile app

Via Fax: 844-902-4564 (Note: new number)

Via Email: [email protected]

US Mail: Varipro Attn: Flexible Spending 5300 Patterson SE, Suite 150 Grand Rapids, Michigan 49512

Q: How do I know how much money is in my account?

A: You can check your account balance 24 hours a day, seven days a week online or in the mobile app. You will also receive your remaining account balance with each reimbursement check.



FSA Eligible & Non-Eligible Expenses FSA/HSA Eligible Health Care Expenses

Please note that we do not intend this list to be comprehensive tax advice. For more detailed information, consult IRS Publication 502 or see your tax advisor.

Acupuncture

Alcoholism treatment

Allergy shots and testing

Ambulance (ground/air)

Artificial limbs

Blind services and equipment

Car controls for handicapped*

Chiropractor services

Coinsurance and deductibles

Contact lenses

Crutches, wheelchairs, walkers

Deaf services-- hearing aid/batteries, hearing aid animal & care, lip reading expenses, modified telephone, etc.

Dental treatment

Dentures

Diagnostic tests

Doctor's fees

Drug addiction treatment & facilities

Drugs (prescription)

Eye examinations and eyeglasses

Home health and/or hospice care

Hospital services

Insulin

Laboratory fees

LASIK eye surgery

Medical alert (bracelet, necklace)

Medical monitoring and testing devices*

Nursing services

Obstetrical expenses

Occlusal guards

Operations and surgeries (legal)

Optometrists

Orthodontia

Orthopedic services

Osteopaths

Oxygen/oxygen equipment

Physical exams (except for employment)

Physical therapy

Psychiatric care, psychologists, psychotherapists

Radial keratotomy related physicals)

Schools (special, relief, or handicapped)

Sexual dysfunction treatment

Smoking cessation programs

Surgical fees

Television or telephone for the hearing impaired

Therapy treatments*

Transportation (essentially and primarily for medical care; limits apply)

Vaccinations

Vitamins*

Weight-loss programs*

X-rays

*If prescribed for a particular ailment or medical condition; provider letter required.

Important Notice About Over-the-Counter Medications Over the counter (OTC) medications require a doctor's prescription to be eligible for FSA/HSA reimbursement. For that reason, OTC medications cannot be purchased using a Benefits Debit Card unless dispensed by a pharmacy the same as a standard prescription (with an Rx number). If a manual claim is submitted for purchase of an OTC medication, both a copy of the prescription and the purchase receipt must be included to receive reimbursement.

Non-medicated OTC products (diabetes test strips, saline solution, band-aids, etc.) do not require a prescription.

FSA/HSA Eligible OTC Medications and Products COPY OF PRESCRIPTION AS WELL AS DETAILED RECEIPT REQUIRED FOR REIMBURSEMENT:

Acne medications & treatments

Allergy & sinus, cold, flu & cough remedies (antihistamines, decongestants, cough syrups, cough drops, nasal sprays, medicated rubs, etc.)

Antacids & acid controllers (tablets, liquids, capsules)

Antibiotic & antiseptic sprays, creams & ointments

Anti-diarrheas

Anti-fungals

Anti-gas & stomach remedies

Anti-itch & insect bite remedies

Anti-parasitics

Baby care (diaper rash ointments, teething gel, rehydration fluids, etc.)

Contraceptives (condoms, gels, foams, suppositories, etc.)

Digestive aids

Eczema & psoriasis remedies

Eye drops, ear drops, nasal sprays

First aid kits

Hemorrhoidal preparations

Hydrogen peroxide, rubbing alcohol

Laxatives

Medicated band-aids & dressings

Motion sickness remedies

Nicotine patches and medications (smoking cessation aids)

Pain relievers (aspirin, ibuprofen, acetaminophen, naproxen, etc.)

Sleep aids & sedatives

Wart removal remedies, corn patches

Under PPACA (Health Reform

Law), the Maximum Annual Election in 2018 is Capped at

$2,650 Per year.

Your Plan may have a lower limit.



EXAMPLES OF ITEMS ELIGIBLE FOR REIMBURSEMENT WITH DETAILED RECEIPT ONLY (NO PRESCRIPTION REQUIRED): Braces & supports Breast pumps for nursing mothers Contact lens solution CPAP equipment & supplies Diabetic testing supplies /equipment

Durable medical equipment (power chairs, walkers, wheelchairs, etc.) Home diagnostic (pregnancy tests, ovulation kits, Non-medicated band-aids, rolled bandages & dressings

OTC varieties of Insulin Reading glasses Sunscreen Thermometers, blood pressure monitors, etc.)

FSA Non-Eligible Health Care Expenses

Advance payment for services to be rendered

Automobile insurance premium allocable to medical coverage

Boarding school fees

Body piercing

Bottled water

Chauffeur services

Controlled substances

Cosmetic surgery and procedures

Cosmetic dental procedures

Dancing lessons

Diapers for Infants

Diaper service

Ear piercing

Electrolysis

Fees written off by provider

Food supplements

Funeral, cremation, or burial expenses

Hair transplant

Herbs & herbal supplements

Household & domestic help

Health programs, health clubs, and gyms

Illegal operations and treatments

Illegally procured drugs

Insurance premiums

Long-term care services

Maternity clothes

Medical savings accounts

Premiums for life insurance, income

protection, disability, loss of limbs, sight or similar benefits

Personal items

Preferred provider discounts

Social activities

Special foods and beverages

Swimming lessons

Tattoos/tattoo removal

Teeth whitening

Transportation expenses to & from work

Travel for general health improvement

Uniforms

Vitamins & supplements without prescription

FSA/HSA Non-Eligible OTC Products The following are examples of Over-the-Counter (OTC) medications and products which are NOT ELIGIBLE for FSA reimbursement. Aromatherapy Baby bottles & cups Baby oil Baby wipes Breast enhancement system Cosmetics (including face cream & moisturizer) Cotton swabs Dental floss Deodorants & anti-perspirants

Dietary supplements Feminine care items Fiber supplements Food Fragrances Hair regrowth preparations Herbs & herbal supplements Hygiene products & similar items Low-carb & low-fat foods Low calorie foods

Lip balm Medicated shampoos & soaps Petroleum jelly Shampoo & conditioner Spa salts Suntan lotion & Oils Toiletries (including toothpaste) Vitamins & supplements without prescription Weight loss drugs for general well-being

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Health Cloud Quick Start Guide (Available 1/1/2019)

How Do I Log on to the Home Page? 1. Go to www.member.varipro.com 2. Enter your login ID and password (both provided by Varipro). 3. Click Login.

The Home Page is easy to navigate:

Easily access the Available Balance and “I Want To” sections to work with your accounts right away.

The I Want To…section contains the most frequently used features for the Consumer Portal.

The Accounts section links to the Account Summary page, where you can see and manage your accounts.

The Tasks section displays alerts and relevant links that enable you to keep current on your accounts.

The Healthcare Savings Goal section graphically displays your HSA savings goals progress.

The Recent Transaction section displays the last 3 transactions on your account(s).

The Quick View section graphically displays some of your key account information.

You can also hover over the tabs at the top of the page.

How Do I File A Claim and Upload a Receipt?

1. On the Home Page, you may simply select the “File a Claim” under the “I want to…” section, OR from any page on the portal, expand the “I want to…” section on the right-hand side of the screen.

2. The claim filing wizard will walk you through the request including entry of information, payee details and uploading a receipt.

3. For submitting more than one claim, click Add Another, from the Transaction Summary page.

4. When all claims are entered in the Transaction Summary, agree to the terms and conditions click Submit to send the claims for processing.

5. The Claim Confirmation page displays. You may print the Claim Confirmation Form as a record of your submission. If you did not upload a receipt, you can upload the receipt from this screen or print a Claim Confirmation Form to submit to the administrator with the required receipts.

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NOTE: If you see a Receipts Needed link in the Tasks section of your Home Page, click on it. You will be taken to the Claims page where you can see the claims that require documentation. You can easily upload the receipts from this page. Simply click to expand the line item to view claim details and the upload receipts link.

How Do I View Current Account Balances and Activity? 1. For current Account Balance only, on the

Home Page, see the Accounts section. 2. For all Account Activity, click on the

Accounts tab from the Home Page to bring you to the Account Summary page. Then you may select the underlined dollar amounts for more detail. For example, click on the amount under “Eligible Amount” to view enrollment detail.

NOTE: You can see election details by clicking to expand the line item for each account.

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All Health Care Expense Activity in One Place

To view and manage ALL healthcare expense activity from EVERY source, use the Dashboard.

1. On the Home Page, under the Dashboard tab. The Dashboard provides you with an easy-to-use consolidated view of healthcare expenses for ongoing management of medical claims, premiums.

2. Easily filter expenses by clicking on the filter options on the navigation pane on the left side of the screen or, by clicking on the field headers within the Dashboard.

3. You can search for specific expenses using the search field on the bottom left side of the screen.

4. Expenses can be exported into an Excel spreadsheet by clicking on the Export Expenses button on the upper left side of the page.

How Do I Add an Expense to the Dashboard? 1. From the Dashboard click on the Add Expense

button in the upper left side of the page. 2. Complete the expense detail fields. You can even

upload a copy of the receipt and, add notes for your records.

3. Once the expense has been added to the Dashboard you can pay the expense, if desired.

How Do I Pay an Expense? 1. You may process payments/ reimbursements for

unpaid expenses directly from the Dashboard page. 2. Expenses will be categorized, and payment can be

initiated for unpaid expenses by clicking on the button to the right of the expense details.

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3. Simply choose which expenses you would like paid and you will be presented with the eligible accounts from which you can initiate payment.

4. When you click Pay, the claim details from the Dashboard will be pre-populated within the claim form. Review & edit the claim details as needed.

5. You will have the option to either request a reimbursement to yourself or pay the provider.

How Do I Edit an Existing Expense in the Dashboard? 1. You can edit expense details for all claim statuses directly

from the Dashboard page. 2. Expand the claim details visible by clicking on the

expense line item from the Dashboard. 3. You will be presented with options to add expense notes,

update the expense details, mark the expense as paid/unpaid or, remove the expense from the Dashboard.

How Do I View My Claims History and Status? 1. From the Home Page, click on the Accounts Tab, and

then click on the Claims link to see your claims history. You can apply filters from the left-hand side of the screen. You can filter by plan year, account type, claim status or receipt status.

2. By clicking on the line of the claim, you can expand the data to display additional claim details.

Did you Know? For an alternative perspective, you may also view claims history and status for all claim types including dependent care on the Dashboard page. You can apply filters from the left-hand side of the screen. Filter options on the Dashboard screen include: expense type, status, date, recipient or merchant/provider. You may also search for a specific expense by entering a description into the search field.

How Do I View My Payment (Reimbursement) History? 1. From the Home Page, under the Accounts tab,

click Payments. You will see reimbursement payments made to date.

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2. By clicking on the line of a payment, you can expand the data to display additional details about the transaction.

How Do I Change My Login and/or Password?

1. From the Home Page, click on the Profile tab, and click Login Information on the left-hand navigation bar.

2. Follow instructions on the screen. (For a new account, the first time you log in, you will be prompted to change the password that was assigned by your plan administrator. Follow the instructions.)

3. Click Save.

Don’t forget to download our new mobile app from the Apple App Store or

Google Play Store to access your information and shopping features on

the go! App Store is a service mark of Apple Inc.

Google Play is a trademark of Google.

Documents

Be Smart About Your Flexible Spending Account Plan KENT … · Care Tax Credit when filing your annual income tax return. Alternatively, IRC §129 allows you to participate in a Dependent